Molly Ayala
New York State offers a range of incentives for those looking to purchase an electric vehicle (EV) or plug-in hybrid. These include the Drive Clean Rebate, which offers up to $2,000 off the purchase or lease of a new EV, and the Inflation Reduction Act (IRA) tax credit, which can provide up to $7,500 in savings. Combined, these incentives can save New York residents up to $9,500 on a selection of new EV models. In addition to these incentives, New York also offers various programs and rebates to promote the adoption of electric vehicles, such as funding for charging stations and incentives for fuel cell electric trucks and buses.
| Characteristics | Values |
|---|---|
| State tax credit for electric vehicles | No, New York offers a rebate of up to $2,000 for buying an eligible electric vehicle or plug-in hybrid. |
| Federal tax credit for electric vehicles | Yes, up to $7,500 for buying a new, qualified plug-in EV between 2023 to 2032. |
| Used Vehicle Clean Credit | Up to $4,000 for buying a qualified used electric vehicle from a licensed dealer for $25,000 or less. |
| State tax credit for EV charging equipment | Yes, up to $1,000 for each item of property. |
| State tax credit for home solar installation | Yes, 25% state tax credit for home solar installation. |
| Tax credit for alternative fuel vehicle fueling infrastructure | Yes, 50% of the infrastructure cost. |
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What You'll Learn
New York's Drive Clean Rebate program
New York State has various incentives for buyers of new electric vehicles (EVs) and plug-in hybrids, as well as for owners of most electric vehicles. Unlike many other states, New York's incentive is a rebate rather than a tax credit.
The New York State Energy Research and Development Authority (NYSERDA) has several programs that provide incentives, funding, and technical assistance to accelerate electric vehicle adoption. The NYSERDA Clean Transportation Program provides funding for projects that enhance mobility, improve efficiency, reduce congestion, and diversify transportation methods and fuels through the research and development of advanced technologies. NYSERDA also offers the ChargeNY program, which provides incentives to accelerate the market introduction of emerging technologies.
NYSERDA's Drive Clean Rebate for Electric Cars Program offers New York State residents, businesses, or government entities a point-of-sale rebate of up to $2,000 toward the purchase or lease of a new plug-in electric car. The rebate amount ranges from $500 to $2,000, based on the model's manufacturer's suggested retail price (MSRP) and all-electric range. For electric cars purchased after June 30, 2021, the rebate amounts are as follows: a full rebate of $2,000 applies to electric cars with a range of over 200 miles, $1,000 for EVs with a range of 40 to 199 miles, and $500 for EVs with a range of less than 40 miles. Additionally, the rebate for any EV with an MSRP of more than $42,000 is $500, so luxury EVs do not qualify for the full amount even with a long range. Leased vehicles are eligible if the lease term is at least 36 months.
The Drive Clean Rebate can be combined with an Inflation Reduction Act (IRA) tax credit of up to $7,500 for additional savings. Participating car dealerships are responsible for applying for the point-of-sale rebate on behalf of the customer by reducing the EV sale price by the full rebate amount, delivering upfront discounts to customers.
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Inflation Reduction Act (IRA) tax credits
The Inflation Reduction Act (IRA) is a collection of clean energy incentives, tax credits, and rebates that promote the adoption of clean energy and combat climate change. The IRA tax credits lower the cost of purchasing a new or used electric vehicle (EV), including battery-electric and plug-in hybrid models, such as cars, pickup trucks, SUVs, and vans.
The IRA tax credit can be combined with New York's Drive Clean Rebate, which offers up to $2,000 off the purchase or lease of eligible EVs, resulting in potential savings of up to $9,500 for New York residents on certain new EV models. The rebate amount varies based on the vehicle's all-electric range and manufacturer's suggested retail price (MSRP).
To be eligible for the IRA tax credit, vehicles must meet certain requirements. For instance, the MSRP for vans, SUVs, and pickup trucks cannot exceed $80,000, while other types of EVs, such as sedans, are capped at $55,000. Additionally, EVs must undergo final assembly in North America and meet critical minerals and battery component requirements to qualify for the full $7,500 tax credit.
The IRA tax credit can be transferred to a car dealership to reduce the upfront purchase price of a new or used EV, or buyers can claim the tax credit later when filing their tax returns. To claim the credit, taxpayers can file Form 8936 with their federal income tax returns. It is important to consult with qualified tax professionals before making any purchases to ensure eligibility for the IRA tax credit.
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Federal tax credits
New York State offers incentives for buyers of new electric vehicles and plug-in hybrids, as well as owners of most electric vehicles. However, unlike many states, the new EV incentive is a rebate rather than a tax credit. The state's Drive Clean Rebate program offers incentives of up to $2,000 for buying an eligible electric vehicle or plug-in hybrid. This rebate is not a tax credit but a discount that immediately reduces the price of the vehicle at the time of purchase.
New York State residents, businesses, or government entities can combine an Inflation Reduction Act (IRA) tax credit of up to $7,500 with their Drive Clean Rebate for additional savings. This federal tax credit is available for new and used electric vehicles that meet the requirements specified in Internal Revenue Code Section 30D.
The IRA tax credit is available for new, qualified plug-in EVs purchased between 2023 and 2032. Leasing a vehicle may allow the purchase to be treated as a "commercial vehicle," thus making it eligible for the full tax credit without satisfying some of the strict program eligibility requirements. It is important to consult with the dealership and a tax professional when researching purchase options.
For used electric vehicles, a tax credit of up to $4,000 is available for vehicles purchased from a licensed dealer for $25,000 or less. The credit equals 30% of the sale price up to a maximum credit of $4,000. This credit is non-refundable, meaning that you cannot get back more on the credit than you owe in taxes, and any excess credit cannot be applied to future tax years.
From January 2024, an Inflation Reduction Act provision will allow consumers to transfer the tax credit to car dealers, reducing the purchase price of eligible new and used vehicles at the time of sale.
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State tax credit for home solar installation
New York State offers a variety of incentives to promote the adoption of electric vehicles and solar energy. While the state does not offer tax credits for electric vehicles, it provides a rebate of up to $2,000 for eligible electric vehicles or plug-in hybrids through the Drive Clean Rebate program. This rebate immediately reduces the vehicle's price at the time of purchase, and New York residents may also be eligible for a federal tax credit of up to $7,500.
Now, for the main focus of your query, New York does offer a state tax credit for home solar installations. This tax credit is equal to 25% of the installed cost of the solar energy system (up to 25 kW on net-metered systems) or $5,000, whichever is less. This credit is available for residential building owners who install solar panels at their personal residences. Additionally, New York exempts the sale and installation of residential solar energy systems from state sales and compensating use taxes. This exemption applies to solar energy systems that produce energy for heating, cooling, hot water, or electricity. However, it does not cover solar pool heating or recreational applications.
Furthermore, New York City and other local jurisdictions grant exemptions from local sales and use taxes for residential solar energy systems. The Historic Homeownership Rehabilitation Credit (HHRC) also covers 20% (up to $50,000 in credits) of the cost of solar installations in historic districts listed on the National Register of Historic Places. The New York City Property Tax Abatement (PTA) offers a four-year tax abatement of 7.5% per year, totaling 30% of the installed cost of the solar system, capped at $250,000.
In addition to these state-level incentives, New York residents may also be eligible for federal tax credits through the Inflation Reduction Act. These federal tax credits can cover up to 30% of the cost of solar projects. NYSERDA's NY-Sun program also provides incentives to lower the upfront cost of solar projects, and there are financing options available for those who may not qualify for traditional financing.
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New York Truck Voucher Incentive Program
The New York Truck Voucher Incentive Program (NYTVIP) provides vouchers or discounts to fleets across New York State that purchase or lease zero-emission medium- and heavy-duty vehicles. The program is administered by the New York State Energy Research and Development Authority (NYSERDA) and aims to make it easier for fleets to adopt zero-emission vehicle technologies while removing the oldest, dirtiest diesel engines from New York roads.
NYTVIP vouchers are based on a percentage of the incremental cost of the vehicle, which is the difference in cost between the zero-emission vehicle and a comparable diesel vehicle, up to a per-vehicle cap. The amount of the voucher may differ depending on the vehicle type, weight class, and location where the vehicle is domiciled. As of March 15, 2024, the funding cap for certain categories has increased to 50%.
Eligible vehicles under the program include all-electric (battery electric or BEV), hydrogen fuel cell electric (FCEV) plug-in hybrid electric (PHEV), conventional hybrid electric (HEV), compressed natural gas (CNG), or propane medium- and heavy-duty vehicles (weight class 3 through 8). To qualify for the vouchers, fleets must scrap a similar older diesel vehicle that is part of their fleet.
NYTVIP vouchers can be combined with additional competitive funding sources, but only up to a maximum of 100% of the incremental cost of the replacement vehicle. While the vouchers can be used in conjunction with regular, non-competitive federal funding, they cannot be combined with Federal Low-No funds (FTA 5339(c)).
The New York Truck Voucher Incentive Program is just one of several initiatives by NYSERDA to promote the adoption of electric vehicles and reduce emissions. NYSERDA also offers the Drive Clean Rebate program, which provides incentives of up to $2,000 for purchasing eligible electric vehicles or plug-in hybrids.
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Frequently asked questions
New York State offers a rebate of up to $2,000 for buying an eligible electric vehicle or plug-in hybrid through the Drive Clean Rebate program. This is not a tax credit but a rebate that immediately reduces the price of the vehicle at the time of purchase.
New York State offers a used vehicle clean credit of up to $4,000. If you buy a qualified used electric vehicle from a licensed dealer for $25,000 or less, you may be eligible for this credit.
Yes, there is a federal tax credit of up to $7,500 for new, qualified plug-in electric vehicles purchased between 2023 and 2032.
Yes, New York residents may be eligible to combine the federal Inflation Reduction Act (IRA) tax credit with the Drive Clean Rebate when purchasing certain new EV models.
Yes, drivers of most electric cars qualify for highway, bridge and tunnel toll discounts through the New York State Thruway tolling program and the Port Authority in New York City.
